November 8, 2025 • 10 mins
This week on the Sunday Panel, resident economist at Opes Partners, Ed McKnight, and journalist, TV producer and commentator, Irene Gardiner, joined in on a discussion about the following issues of the day - and more!
Treasury is calling for the Government to make some asset sales to bring down debts. Is this a viable way out? Where could we start in offloading assets?
The Government has given New Zealand's movie production sector an extra financial boost - do we think this is the right move?
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Episode Transcript
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Speaker 1 (00:06):
You're listening to the Sunday Session podcast with Francesca Rudgin
from News talks 'b Right Panel time.
Speaker 2 (00:13):
Ed McKnight is joining US president economist at Ope. His
partner's Good morning It Hi, Ed, coming in it.
Speaker 3 (00:23):
Okay, we'll get you some here, hear me.
Speaker 2 (00:25):
Welcome. Good to have you with us. Also journalist, TV
producer and commentator Iron Gardener, Good morning, Irene.
Speaker 4 (00:31):
Good morning, thank Youscu. I was almost going to deepen
my voice and pretend to be edge for a moment there.
Speaker 3 (00:37):
Now you'd have to raise an Irene, just make it
a little bit higher.
Speaker 4 (00:42):
And I suddenly have to know all about economics.
Speaker 2 (00:45):
And then what I would have really liked with that,
Irene is if we couldn't get it to air, you
would have had to have pretended to be two people
for a panel. I would liked to have seen you
attempt to do that.
Speaker 4 (00:54):
Anyway I would have tried.
Speaker 2 (00:56):
You would have tried it. Now, since we do have you,
let's start with Treasury, who released their three yearly investment statement,
and it was pretty interesting because they're basically saying we're
not going to grow away out of this fiscal deficit,
and they're sort of suggesting that the government sells some
state assets, the ones that are underperforming are no longer
fit for the purpose. Do you think that this is
(01:19):
what we need to do to make sure that we
the books do not spiral into the red.
Speaker 3 (01:24):
I think it's definitely worth a conversation, Francesca. I think
a lot of Keywis wouldn't realize just how much our
debt has increased over the last five years. Our netcore
crown debt is up. It is actually tripled in the
last five years. During those COVID years. As a percentage
of GDP, it's doubled. It's gone from twenty percent of
GDP up to about forty two percent. And if I
(01:45):
just think about my own household, if my mortgage tripled
over five years, you betcha I'd be thinking about, are
there some assets that we can sell, whether it's the
second car or at a vestment property or a boat
or something, what can we do to try and tackle that?
The other thing, you know, just thinking about the government
has a households know that once you've got Christmas coming
(02:08):
up and you know you're going to have the sextra spending,
you bet that you're going to have to start planning
for that. And I think that we've basically got the
equivalent of Christmas coming up for the government because we've
got a lot of baby boomers who are going to
want their pensions soon and so our spending's going to
increase as well, and we've got to be preparing for that.
And what Treasury is saying is, well, if you don't
want to cut back on spending and you don't want
(02:28):
to increase revenue from taxes, maybe we should start looking
at asset sales. And I think it's worth a conversation.
Speaker 2 (02:33):
Okay, so ed, does anybody actually want to buy an
asset if it's underperforming or no longer fit for purpose?
Speaker 3 (02:40):
Well, some people will because the market will be able
to take TVNZ for example, there might be smart people
out there who would be able to purchase that asset
make the investments necessary to make it start performing. What
we'll have to make sure that we do as well, though,
is that we don't just look at if we sell
an asset and pay off some debt, how much are
(03:00):
we going to save. We've also got to think about, well,
what revenue are we not going to get if we
sell that ass So we've got to do it on
a kind of case by case basis, but I think
it's worth saying, well, why does the government own QV
which is a property valuation company when there are lots
of other property valuation companies out there? Maybe that doesn't
make sense. Maybe it doesn't make sense owning TV and
(03:22):
Z when the market has shown us that you can
have lots of very very fine media companies owned by
private providers like NZ.
Speaker 2 (03:29):
Me, you've given me a beautiful segue to Irene. Here Irene,
is TVNZ underperforming or no longer fit for purpose?
Speaker 4 (03:37):
I would completely disagree with everything in just checked about.
I think it's really critical that TVNZ does stay state owned.
I don't think people realize just how much perial local
journalism and local production is in And yeah, sure it
(03:57):
might be able to perform better commercially, but the way
it would do that would be to cut back on
local production and local journalism because those things are what
costs money. And so even though TVs it works to
a commercial mandate not a public good mandate, it does
do a lot of public good work and it is
(04:18):
important to New Zealand, and I think losing that would
actually be quite profound and I mean, to be honest,
I don't think anyone would buy it at the moment anyway,
because it's so hard for free to wear with big
tech just unregulated leaping all over us. But even if
you could, you would immediately lose that, you know, that
(04:40):
desire to basically keep local production, local journalism as strong
as you can and difficult circumstances, so keep TV in there.
Speaker 2 (04:49):
But it raises a really good point, you know, between
the two of you, in between us as a country.
Everybody will go, oh, yes, that's a good one to
let go or actually no, I want to keep that one.
It's hard to work out when you sort of look
at the list. I think ed you were quite right
about the quoteable value. That kind of makes sense.
Speaker 4 (05:06):
In the airport, why do we need the airports?
Speaker 3 (05:09):
Do we need the airport's yid No, I agree with
Irene there. I mean Auckland Airport and Wellington Airport are
not owned by central government. We've seen local government start
to sell down their holdings. There's no real reason why
the council or the government needs to own these. One
of the things people sometimes say is here but what
if they get into financial trouble and they need investment. Well,
(05:31):
that's a really good time when the government might start investing.
Then at that point when they're able to get a
really really good deal, but at a time when those
assets are performing, well, that's the point where you can
start selling them at a really good price. If you
have to buy it back later at a really cheap price,
that might make commercial sense.
Speaker 2 (05:47):
Were there any other businesses there on the list that
you thought, you know, we could let go ed?
Speaker 3 (05:54):
Oh yeah, a whole heap of them. Frantasically, here we go, Cordia.
Why do we own Cordia which does cybersecurity and also
does some of the infrastructure around telecommunications and TV. Why
do we need to own that company? The other thing
New Zealand posts there's no real reason why the why
the government needs to own what is effectively becoming a
(06:16):
courier company. You might put some regulations around what they
can and can't do, because you still want to make
sure that people are able to get their letters delivered,
but there's no real commercial reason why we need to
own that, and to be honest, the market could do
it much better. I'll give you another example, Telecom. We
used to own that as the government used to own that.
(06:37):
You know, it's performing well as Spark And it's just
to say businesses will provide services that people want and
can do so very efficiently. We don't need the government
to own everything.
Speaker 2 (06:48):
What about you, Irena, you opened the idea of asset sales.
Is there anything on the list you'd be happy to flick? Yes?
Speaker 4 (06:54):
And though I think there are some companies where the
public good element and need to New Zealanders, like you know,
a postal service, So you've got to be a little
bit careful because if they fail, we're going to end
up buying them back anyway because we have to have them.
So I don't think you know, I'm not opposed ideologically
selling some things, but I think it needs it needs
(07:15):
a careful conversation. I personally I agree that we need
to get more money into use in economy, but I'm
more interested in, you know, what Labor's proposing with the
beginnings of the capital gains TEX so that we can
keep that at a modest level, get it in because
it's not particularly politically palatable, and then maybe build on
that a bit later. I mean, we've got to do something.
Treasury is right in that respect, But yeah, I don't know.
(07:36):
And of course you've sold something, you haven't lost it.
You can't get that bit of money back again. So
you know, I mean, every time we're broke, if we
keep telling eventually nothing.
Speaker 2 (07:46):
Irene, I want to talk to you about the screen
industry rebate, screen production rebate. Yes, the screen rebate scheme
that the government announced. The changes to that are going
to kick off at the beginning of next year. We
have a strong industry here, It makes money, it employs
a lot of people. It seems like a very pragmatic
(08:08):
move to me, in a step in the right direction,
that we're making it more competitive and hopefully more sustainable.
Were you happy with what the government announced this week?
Is it enough?
Speaker 4 (08:18):
The industry was really happy. I was at Nikola Willis's
announcement and you could tell that it was incredibly welcome news.
It's been pretty tough out there in the international set lately,
and that's for a range of factors. And it's not
only about our competitiveness, but anything to help our competitiveness
obviously helps. We had sort of thought, I'm kind of
(08:39):
talking with mostparta president hat on that it might be
a blanket increase in our percentage amount because we're quite
low by world standards, and it isn't that, but I
think that is a pragmatic decision. That she's got a
coalition partner who are not great fans of the rebate
in act, so she's kind of done a whole range
(09:01):
of things which will probably in effect do as much good,
but in a different way. The biggest thing of all,
the one that's the real game changer, is taking down
the value of projects. Used to be, you had to
be fifteen million or more your project to qualify. Now
it's down to four million, So that immediately opens us
up to indie films and mid range budget films and
(09:22):
all sorts of stuff, not even just films, because it's
not just theatrical anymore. So yeah, it should be quite
a game changer. It should fire things up a bit
again in the international space. And it is said as
of course separate from domestic, but two parts of the
industry sort of need and feed each other. So yeah,
very important and we're really pleased.
Speaker 2 (09:42):
Are you a fan of the rebates ed scheme.
Speaker 3 (09:44):
Well, I'm kind of a little bit confused by it,
and I'm sure this is where Irene can help educate me.
One of the reasons I know that we keep increasing
it is because lots of other companies also provide these
rebates because they want movies made in their countries. But
one of the things I can't figure out, Irene, is well,
why is it that all of these different countries and
(10:04):
governments are wanting to specifically favor the movie production industry.
What's the reason behind that?
Speaker 2 (10:11):
Can you answer that in thirty seconds, please, Irene?
Speaker 4 (10:16):
Probably not in thirty seconds, I guess just because the
return is so high on the rebate dollar. It may
be a little bit also because it's a bit of
an interesting industry and connects well into tourism and helps
the countries in that way. I could do a lot more,
but you've only got a couple of seconds.
Speaker 2 (10:32):
I love it. I love it succinct Irene. Anyway, we'll
find out another time where that's convinced it or not ed.
McKnight and iron Gun, and thank you both very much
for your time this morning. Appreciate it.
Speaker 1 (10:42):
For more from the Sunday session with Francesca Rudgin, listen
live to news Talks there'd be from nine am Sunday,
or follow the podcast on iHeartRadio.
You're listening to the Sunday Session podcast with Francesca Rudgin
from News talks 'b Right Panel time.
Speaker 2 (00:13):
Ed McKnight is joining US president economist at Ope. His
partner's Good morning It Hi, Ed, coming in it.
Speaker 3 (00:23):
Okay, we'll get you some here, hear me.
Speaker 2 (00:25):
Welcome. Good to have you with us. Also journalist, TV
producer and commentator Iron Gardener, Good morning, Irene.
Speaker 4 (00:31):
Good morning, thank Youscu. I was almost going to deepen
my voice and pretend to be edge for a moment there.
Speaker 3 (00:37):
Now you'd have to raise an Irene, just make it
a little bit higher.
Speaker 4 (00:42):
And I suddenly have to know all about economics.
Speaker 2 (00:45):
And then what I would have really liked with that,
Irene is if we couldn't get it to air, you
would have had to have pretended to be two people
for a panel. I would liked to have seen you
attempt to do that.
Speaker 4 (00:54):
Anyway I would have tried.
Speaker 2 (00:56):
You would have tried it. Now, since we do have you,
let's start with Treasury, who released their three yearly investment statement,
and it was pretty interesting because they're basically saying we're
not going to grow away out of this fiscal deficit,
and they're sort of suggesting that the government sells some
state assets, the ones that are underperforming are no longer
fit for the purpose. Do you think that this is
(01:19):
what we need to do to make sure that we
the books do not spiral into the red.
Speaker 3 (01:24):
I think it's definitely worth a conversation, Francesca. I think
a lot of Keywis wouldn't realize just how much our
debt has increased over the last five years. Our netcore
crown debt is up. It is actually tripled in the
last five years. During those COVID years. As a percentage
of GDP, it's doubled. It's gone from twenty percent of
GDP up to about forty two percent. And if I
(01:45):
just think about my own household, if my mortgage tripled
over five years, you betcha I'd be thinking about, are
there some assets that we can sell, whether it's the
second car or at a vestment property or a boat
or something, what can we do to try and tackle that?
The other thing, you know, just thinking about the government
has a households know that once you've got Christmas coming
(02:08):
up and you know you're going to have the sextra spending,
you bet that you're going to have to start planning
for that. And I think that we've basically got the
equivalent of Christmas coming up for the government because we've
got a lot of baby boomers who are going to
want their pensions soon and so our spending's going to
increase as well, and we've got to be preparing for that.
And what Treasury is saying is, well, if you don't
want to cut back on spending and you don't want
(02:28):
to increase revenue from taxes, maybe we should start looking
at asset sales. And I think it's worth a conversation.
Speaker 2 (02:33):
Okay, so ed, does anybody actually want to buy an
asset if it's underperforming or no longer fit for purpose?
Speaker 3 (02:40):
Well, some people will because the market will be able
to take TVNZ for example, there might be smart people
out there who would be able to purchase that asset
make the investments necessary to make it start performing. What
we'll have to make sure that we do as well, though,
is that we don't just look at if we sell
an asset and pay off some debt, how much are
(03:00):
we going to save. We've also got to think about, well,
what revenue are we not going to get if we
sell that ass So we've got to do it on
a kind of case by case basis, but I think
it's worth saying, well, why does the government own QV
which is a property valuation company when there are lots
of other property valuation companies out there? Maybe that doesn't
make sense. Maybe it doesn't make sense owning TV and
(03:22):
Z when the market has shown us that you can
have lots of very very fine media companies owned by
private providers like NZ.
Speaker 2 (03:29):
Me, you've given me a beautiful segue to Irene. Here Irene,
is TVNZ underperforming or no longer fit for purpose?
Speaker 4 (03:37):
I would completely disagree with everything in just checked about.
I think it's really critical that TVNZ does stay state owned.
I don't think people realize just how much perial local
journalism and local production is in And yeah, sure it
(03:57):
might be able to perform better commercially, but the way
it would do that would be to cut back on
local production and local journalism because those things are what
costs money. And so even though TVs it works to
a commercial mandate not a public good mandate, it does
do a lot of public good work and it is
(04:18):
important to New Zealand, and I think losing that would
actually be quite profound and I mean, to be honest,
I don't think anyone would buy it at the moment anyway,
because it's so hard for free to wear with big
tech just unregulated leaping all over us. But even if
you could, you would immediately lose that, you know, that
(04:40):
desire to basically keep local production, local journalism as strong
as you can and difficult circumstances, so keep TV in there.
Speaker 2 (04:49):
But it raises a really good point, you know, between
the two of you, in between us as a country.
Everybody will go, oh, yes, that's a good one to
let go or actually no, I want to keep that one.
It's hard to work out when you sort of look
at the list. I think ed you were quite right
about the quoteable value. That kind of makes sense.
Speaker 4 (05:06):
In the airport, why do we need the airports?
Speaker 3 (05:09):
Do we need the airport's yid No, I agree with
Irene there. I mean Auckland Airport and Wellington Airport are
not owned by central government. We've seen local government start
to sell down their holdings. There's no real reason why
the council or the government needs to own these. One
of the things people sometimes say is here but what
if they get into financial trouble and they need investment. Well,
(05:31):
that's a really good time when the government might start investing.
Then at that point when they're able to get a
really really good deal, but at a time when those
assets are performing, well, that's the point where you can
start selling them at a really good price. If you
have to buy it back later at a really cheap price,
that might make commercial sense.
Speaker 2 (05:47):
Were there any other businesses there on the list that
you thought, you know, we could let go ed?
Speaker 3 (05:54):
Oh yeah, a whole heap of them. Frantasically, here we go, Cordia.
Why do we own Cordia which does cybersecurity and also
does some of the infrastructure around telecommunications and TV. Why
do we need to own that company? The other thing
New Zealand posts there's no real reason why the why
the government needs to own what is effectively becoming a
(06:16):
courier company. You might put some regulations around what they
can and can't do, because you still want to make
sure that people are able to get their letters delivered,
but there's no real commercial reason why we need to
own that, and to be honest, the market could do
it much better. I'll give you another example, Telecom. We
used to own that as the government used to own that.
(06:37):
You know, it's performing well as Spark And it's just
to say businesses will provide services that people want and
can do so very efficiently. We don't need the government
to own everything.
Speaker 2 (06:48):
What about you, Irena, you opened the idea of asset sales.
Is there anything on the list you'd be happy to flick? Yes?
Speaker 4 (06:54):
And though I think there are some companies where the
public good element and need to New Zealanders, like you know,
a postal service, So you've got to be a little
bit careful because if they fail, we're going to end
up buying them back anyway because we have to have them.
So I don't think you know, I'm not opposed ideologically
selling some things, but I think it needs it needs
(07:15):
a careful conversation. I personally I agree that we need
to get more money into use in economy, but I'm
more interested in, you know, what Labor's proposing with the
beginnings of the capital gains TEX so that we can
keep that at a modest level, get it in because
it's not particularly politically palatable, and then maybe build on
that a bit later. I mean, we've got to do something.
Treasury is right in that respect, But yeah, I don't know.
(07:36):
And of course you've sold something, you haven't lost it.
You can't get that bit of money back again. So
you know, I mean, every time we're broke, if we
keep telling eventually nothing.
Speaker 2 (07:46):
Irene, I want to talk to you about the screen
industry rebate, screen production rebate. Yes, the screen rebate scheme
that the government announced. The changes to that are going
to kick off at the beginning of next year. We
have a strong industry here, It makes money, it employs
a lot of people. It seems like a very pragmatic
(08:08):
move to me, in a step in the right direction,
that we're making it more competitive and hopefully more sustainable.
Were you happy with what the government announced this week?
Is it enough?
Speaker 4 (08:18):
The industry was really happy. I was at Nikola Willis's
announcement and you could tell that it was incredibly welcome news.
It's been pretty tough out there in the international set lately,
and that's for a range of factors. And it's not
only about our competitiveness, but anything to help our competitiveness
obviously helps. We had sort of thought, I'm kind of
(08:39):
talking with mostparta president hat on that it might be
a blanket increase in our percentage amount because we're quite
low by world standards, and it isn't that, but I
think that is a pragmatic decision. That she's got a
coalition partner who are not great fans of the rebate
in act, so she's kind of done a whole range
(09:01):
of things which will probably in effect do as much good,
but in a different way. The biggest thing of all,
the one that's the real game changer, is taking down
the value of projects. Used to be, you had to
be fifteen million or more your project to qualify. Now
it's down to four million, So that immediately opens us
up to indie films and mid range budget films and
(09:22):
all sorts of stuff, not even just films, because it's
not just theatrical anymore. So yeah, it should be quite
a game changer. It should fire things up a bit
again in the international space. And it is said as
of course separate from domestic, but two parts of the
industry sort of need and feed each other. So yeah,
very important and we're really pleased.
Speaker 2 (09:42):
Are you a fan of the rebates ed scheme.
Speaker 3 (09:44):
Well, I'm kind of a little bit confused by it,
and I'm sure this is where Irene can help educate me.
One of the reasons I know that we keep increasing
it is because lots of other companies also provide these
rebates because they want movies made in their countries. But
one of the things I can't figure out, Irene, is well,
why is it that all of these different countries and
(10:04):
governments are wanting to specifically favor the movie production industry.
What's the reason behind that?
Speaker 2 (10:11):
Can you answer that in thirty seconds, please, Irene?
Speaker 4 (10:16):
Probably not in thirty seconds, I guess just because the
return is so high on the rebate dollar. It may
be a little bit also because it's a bit of
an interesting industry and connects well into tourism and helps
the countries in that way. I could do a lot more,
but you've only got a couple of seconds.
Speaker 2 (10:32):
I love it. I love it succinct Irene. Anyway, we'll
find out another time where that's convinced it or not ed.
McKnight and iron Gun, and thank you both very much
for your time this morning. Appreciate it.
Speaker 1 (10:42):
For more from the Sunday session with Francesca Rudgin, listen
live to news Talks there'd be from nine am Sunday,
or follow the podcast on iHeartRadio.
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